Time to read this post: 6 minutes


So you think you want to crowdfund? 6 questions you must answer before you decide.

You have probably heard that one about the guy who crowdfunded over $50,000 for potato salad. If not the potato salad story, you’ve surely heard of the gut-wrenching, community togetherness story of the crowdfunding campaign for Toronto’s Elijah Marsh.

These examples are outliers.

The idea of crowdfunding is being tossed around at a lot of nonprofits and charities these days. As we hear about success stories, it’s easy to think “Hey, that could be me!” If you think your organization is ready for crowdfunding, it is important to stop right now and take a good hard critical look at whether crowdfunding will actually work for your organization. Here are some important questions to ask yourself before launching a campaign:

What’s the money for?

The best kind of project for a crowdfunding campaign is one that is compelling and has a great story behind it. Do you have a great story with great assets (photos and video) to back it up? These are essential pieces to the crowdfunding puzzle.

Your story needs to make a human connection. The typical supporter on a crowdfunding campaign need to see a benefit they can connect to.

Trying to raise capital/general purpose funds? You are going to want to re-think that strategy. While all of us who work in or support the nonprofit sector know it’s important to keep the lights on, crowdfunding platforms are typically fickle about this kind of funding.

How much are you trying to raise? 

The average crowdfunding campaign raises $5000 to $7000. A similar amount to a lot of those grant applications you’ve probably been applying to.  You must set a reasonable goal for your crowdfunding campaign.

Which brings us to the next question…

Who will seed?

Successful campaigns are those that have a well-networked community behind them (in addition to being a super awesome project). Trustworthiness is key to a successful crowdfunding campaign. The best way to look trustworthy is to have funding rolling in right as you launch. How do you do this? You line up donations before the campaign launches.

That’s right! You need to approach some of your current donors, preferably those who are the best fit to support your project, and ask them to donate on campaign launch day.

Are you well connected?

When you look at the successful crowdfunding campaigns, and not just the outliers, a trend emerges: connections.

If you want to have a successful crowdfunding campaign, you can’t expect strangers to fund it – at least not entirely. The majority of successful crowdfunding campaigns are funded by people you already know. This means you’re going to have to tap your existing donors for more cash.

This stat from Fundable outlines the need for connectedness:

“Social Media is a critical factor in crowdfunding success: for every order of magnitude increase in Facebook friends (10, 100, 1000), the probability of success increases drastically (from 9%-, 20%, to 40%).”

Do you have the capacity for follow-up and long-term stewardship?

You are going to be pouring time and effort into planning and launching this campaign. A smart nonprofit (like yours) knows that long-term success is about building friendships in your community.

Even though a lot of your funders will already be long-time supporters, a crowdfunding campaign is full of opportunities to lay the foundation for new relationships. What kind of ongoing donor communication and stewardship program does your nonprofit have? If you’re relying on paper-only communications, your new online donors might not migrate over to the offline world. At least not at first, so if you don’t have an online (this includes email)  communications plan, crowdfunding is probably not for you.

How will you deliver what you promised?

It is important to establish trust with your funders. Between your perks and your actual project, you’re going to have several deliverables that you must follow through on.  Can you do it?

Let’s talk perks: Can you get them donated to you? Are they meaningful to the context of your project or organization? Are they tangible or intangible? How will you deliver them? Have you budgeted for delivery costs?

Hot tip: If you have to purchase your perks, they should cost at least 50% less than the amount donated. (If someone donates $100, the associated perk should be $50 or less…and I recommend erring on the side of way less). The best possible scenario for a nonprofit is to have perks donated.

In addition to the perks, you need to deliver on your project. If you raise $5000 to build a new playground at the women’s shelter, you better build that playground. Your funders have trusted you to do as you say. Use that capacity for long-term follow up to update your funders on progress. Maybe even send an invite to the public opening, launch, or celebration party.

Crowdfunding is hard. Really hard.

Crowdfunding doesn’t happen by magic. You need to spend some serious time (1-2 months) prior to your campaign launch getting your ducks in a row. You need to write compelling copy, record (and edit) your campaign videos, find your seed funding, develop a communications strategy for your online and offline activities, get traditional PR activities underway, and you need to wrangle your amplifiers to help spread the word.

Once the campaign starts, you will basically be doubling your workload. You will be thanking everyone who contributes, sending messages out on all your channels, connecting with individual amplifiers, and pushing as hard as you can to reach your campaign’s tipping point.

Then the campaign ends (deep breath) but you don’t want to take too long before you start on your follow up. Send your thank you notes, send your perks, publish your post-campaign blog, and write your follow up media release.

Crowdfunding is not impossible

You have probably read through to this point thinking, “Gosh, this isn’t what I thought it would be.” That’s ok! If you can answer these questions and you feel like your project is a great fit then take on a crowdfunding campaign (and tweet me @socially_good so I can cheer you on). It takes a lot of work to do a successful crowdfunding campaign. If you plan ahead, understand the challenges, and leverage your existing networks, you’ll have a good chance of funding that awesome project!

– Allie Kosela